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Teachers May Be Exempt from Income Tax with Proposal Approved in the Senate That Redefines Salary Ranges and Creates New Rules for Profits and Dividends. The Project Will Still Be Analyzed by the Chamber of Deputies.
End of Tax for the Teacher: Approved Bill in the Senate Provides Exemption Up to R$ 5 Thousand and New Rule for Profits Above R$ 1.2 Million
Education professionals may stop paying Income Tax if they earn up to R$ 5 thousand per month.
The change is part of the PL 1.952/2019, approved on September 24 by the Finance and Economic Affairs Committee (CAE) of the Senate, which also establishes a minimum tax for high incomes and sets a 10% rate on profits and dividends for those earning over R$ 1.2 million per year.
The text is now under review in the Chamber of Deputies.
What Changes for the Teacher’s Salary
According to the substitute approved in the CAE, salaries up to R$ 5 thousand will have zero IR.
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Those earning between R$ 5,000.01 and R$ 7,350 will have a gradual discount, which decreases as income approaches the upper limit of that range.
In practice, teachers and other workers earning within this range will see immediate relief in their paychecks, without needing to wait for the annual declaration.
Additionally, the project adjusts values for the simplified declaration and includes compensation measures for states and municipalities to neutralize losses from withholding tax.
The focus, according to the rapporteur, is to recover part of the historical lag in the tax table without breaking the principle of progressivity.
New Rule for Profits and Dividends
The text creates the Minimum Personal Income Tax (IRPFM), aimed at high-income taxpayers who currently pay a very low effective rate due to concentrating earnings in profits and dividends.
Under the rule, those with annual taxable income above R$ 600 thousand will face a progressive minimum charge up to 10% when exceeding R$ 1.2 million per year.
There will also be a withholding of 10% at the source for individuals receiving monthly profits exceeding R$ 50 thousand from companies, with safeguards to prevent double taxation and exclusion of companies from the Simples Nacional.
The proposal also postpones the incidence on already accumulated and undistributed profits, so that the collection focuses on results generated from the law’s entry into force.
The measure aims to reduce distortions and provide predictability for the financial planning of companies and investors.
Congress Process and Parallel Texts
As it is a substitute approved in the CAE, the PL 1.952/2019 still needs to be reviewed by the Chamber.
In parallel, the deputies approved on October 1 the PL 1.087/2025, from the Executive, which also zeros the IR up to R$ 5 thousand and establishes minimum level of 10% for high incomes.
Thus, the Senate and Chamber are working on similar fronts, and the convergence of the versions should occur in the next stages, when one House will analyze the text coming from the other. Until then, none of the changes will have practical effect.
Specific Proposal for Education Professionals
In addition to the advancement in the Senate, the PL 4.687/2025 is under discussion in the Chamber, presented by Deputy Luciene Cavalcanti (PSOL-SP).
The initiative proposes full exemption from IR on earnings of teachers and other professionals in basic and higher education, regardless of the value within the rules defined in the project.
The text was submitted on September 19 and is currently in the early stages of processing.
If it progresses, it will function as a policy for specific valuation of the career, distinct from the broad reform of the table.
Context: Career and Adherence to the National Teacher Exam
The debate on income and teacher valuation occurs in the same year the government launched the National Teacher Exam (PND).
In the first edition, the Ministry of Education reported over 1.1 million registrations, a number that demonstrates the interest of graduates and graduates in competing for positions in public networks.
The exam is part of the More Teachers program, which aims to reach 2.3 million teachers in the country with training, selection, and retention actions.
The adherence of candidates and networks to the PND helps to gauge the potentially impacted audience by changes in the IR.
For novice professionals or those working in roles with remuneration up to R$ 5 thousand, the exemption tends to increase disposable income.
Teachers with additional roles, two links, or progressions that exceed the exemption limit may benefit partially from gradual reduction up to R$ 7.350.
Next Steps for the Proposal
In the Senate, senators in favor of the measure believe that the processing can advance quickly, given the approval of the substitute in the CAE and the green light already given by the Chamber to a project with a similar design.
The final decision will depend on agreement between the Houses to reconcile texts and any points for tax compensation.
In the meantime, the specific proposal for education opens another front: if it advances, it may grant permanent exemption on the earnings of those working in classrooms and in pedagogical and administrative functions in basic and higher education, regardless of which broad reform of the table is approved.
How will these changes in Income Tax alter your reality — do you believe that the exemption up to R$ 5 thousand solves the essentials for the category, or should the specific proposal for teachers gain priority in Congress?
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